Business is all about commercial transactions. These transactions result in the critical revenue streams necessary for businesses to survive. In some cases, businesses purchase goods or services which are helpful or necessary for the company to operate. Goods and services may be purchased as “overhead” (e.g. pencils and pens for employees) or for redistribution to the ultimate consumer (e.g. software to be distributed by a PC seller in connection with the sale of PCs).
While commercial transactions between parties have occurred practically since the beginning of time, the methodology by which they are conducted has evolved rapidly. This is especially true in recent years with the advent of the computer, the internet and other communications technologies.
One recent development has been so called “on-line commerce”. This umbrella term generally refers to the conduct of business and the consummation of business transactions through an electronic medium available to both parties through which orders may be communicated and processed. For example, consumers may purchase various goods through on-line stores available on the internet. In this case, the age old requirement of a face to face transaction in, for example, a retail brick and mortar store is unnecessary. Instead, a consumer reviews available offerings on the internet, selects one for purchase and orders it. The consumer may pay for the purchase by credit card and receive the item in the mail a few days later.
In addition to the above described business to consumer transactions, business to business transactions which occur via computers and various communications systems have also become commonplace. For example, electronic commerce (“e-commerce”) systems, services and software exist whereby companies may enter into purchase and sale transactions on an automatic or semiautomatic basis. Through the use of these e-commerce systems, purchasing entities may, for example, be set up to automatically receive re-orders of consumable supplies on a rolling basis from a predetermined supplier. In some cases, the price and quantity may be pre-negotiated or at least known ahead of time by the purchaser. In other cases, the purchasing entity may agree that it will accept a certain quantity on a rolling basis at the then current market price, whatever it may be. Communication in these systems between buyers and sellers may occur through various communication channels such as the internet, private local or wide area network or dialup access.
While these systems are extremely successful, they do suffer drawbacks. In particular, these systems generally operate under the restriction that the supplier-purchaser relationship is predefined and relatively inflexible. By way of example, existing e-commerce systems and services generally require the purchaser to preselect its supplier with respect to specific goods and/or services. After selection, these goods and services are provided exclusively by the preselected supplier regardless of price or terms. As mentioned above, in many cases where rolling orders are used, the purchasing entity is required to accept goods/services at a future price which is likely unknown at the time of the initial order or when the relationship is set up. This can be disadvantageous to the purchaser not only in terms of pricing but also in terms of product/service quality and fitness for purpose. In other words, the purchaser may, due to a prior commitment made to a supplier, be stuck with an inferior product/service or one that does not meet its needs as well as another product/service which would otherwise be available to the purchaser.